CYPRUS: Calls grow for Finance Minister to resign over Co-op debacle

The government rejects the findings of a public inquiry into the demise of the Cyprus Co-op Bank which found that Finance Minister Harris Georgiades bears the most responsibility for its failure.

Opposition parties have demanded that Georgiades assumes responsibility for the collapse of the island’s second largest bank following the probe’s findings.

Main opposition party AKEL urged Georgiades to step down or for President Nicos Anastasiades to sack him, pointing out that the government has broader responsibilities for the collapse of the Co-op.

Commenting on the inquiry findings, AKEL spokesman Stefanos Stefanou said that the President could not have been unaware of what was happening.

Stefanou said he government has huge responsibilities and has made mistakes which were recorded in the probe’s findings.

The Co-op was sustainable, as confirmed by the European Union and the European Central Bank.

Stefanou also referred to possible civil and criminal liabilities which should be investigated by the police and the Attorney General.

DIKO President Nicolas Papadopoulos said the government should sack Harris Georgiades if it is to maintain its credibility in the eyes of the public.

He pointed out that based on the probe’s findings the President seems partially to blame, because he was aware of the disastrous course the Co-op was on but misled the public opinion.

Papadopoulos said that the Central Bank also bears responsibilities for not monitoring the Co-op in an adequate manner.

The inquiry found that The Finance Minister bears the heaviest responsibilities for the failure of the Cooperative Credit Sector (CCS). We could say that (his responsibilities) are proportionally similar to those of a big shareholder in private company, which failed due to his mismanagement.

The Finance Minister very early had repeatedly, and sometimes strict, warnings both by the Cypriot regulator but mainly by the European regulators on the CCB’s very poor and weak corporate governance. However, he did nothing, the 844-page report said.

The Committee also laid blame at the door of Anastasiades for not removing Georgiades from his post.

If the President bears some responsibility for what led to the expedited sale of a part of the CCB to Hellenic Bank it is because he kept to the Finance Minister in his position, a person which for a period of more than four years, did not manage to lead the Co-op away from its destructive course.

The Co-op failed to reduce its huge burden of non-performing loans despite warnings by the European Central Bank and the local regulator, the Central Bank of Cyprus.

The struggling Co-op, Cyprus’ second largest lender which was bailed out by the state in 2013 and in 2015 with Euros 1.7 bln injection, was split between a bad bank and a good bank. The good assets were sold to Hellenic Bank, which paid the state Euros 74 mln and received a balance sheet of Euros 10.3 bln.

Georgiades tweeted: “I have undertaken the political responsibility for the economy of our country on a daily basis for 6 years now, with the authority of the President of the Republic. And as is the case for everyone, we are judged on our results.

Source: The Financial Mirror